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First Trust Cloud Computing ETF (SKYY)
Investment Objective/Strategy - The First Trust Cloud Computing ETF is an exchange-traded fund. The investment objective of the Fund is to seek investment results that correspond generally to the price and yield, before the Fund's fees and expenses, of an equity index called the ISE CTA Cloud Computing™ Index.
There can be no assurance that the Fund's investment objectives will be achieved.
Index Description According to the Index Provider
  • The Index is a modified theme strength-weighted index designed to track the performance of companies involved in the cloud computing industry. To be included in the index, a security must be classified as a cloud computing company by the Consumer Technology Association (CTA) and meet the following criteria:
    • Minimum market capitalization of $500 million;
    • Minimum free float of 20%;
    • Minimum three-month average daily dollar trading volume (ADDTV) of $5 million.
    • The security’s issuer must not be identified by the U.S. Securities and Exchange Commission as having used to audit its financial statements an accounting firm that has been identified by the Public Company Accounting Oversight Board (PCAOB) under the Holding Foreign Companies Accountable Act (HFCAA).
  • Each security is then classified according to the following three business categories:
    • Infrastructure-as-a-Service (IaaS): Companies that deliver cloud computing infrastructure – servers, storage, and networks – as an on-demand service.
    • Platform-as-a-Service (PaaS): Companies that deliver a platform for the creation of software in the form of virtualization, middleware, and/or operating systems, which is then delivered over the Internet.
    • Software-as-a-Service (SaaS): Companies that deliver software applications over the Internet enabling other companies to conduct their operations using the application.
  • The Index employs a modified theme strength-weighted methodology using the cloud score weighting.
    • At every index evaluation, each security has its cloud score calculated by receiving a score for each category (IaaS, PaaS, and SaaS), 1 if it is operating in that category and 0 if it is not. The maximum score that can be achieved is a 6 (3 for IaaS, 2 for Paas, 1 for Saas).
    • Each company’s total score is divided by the total sum of the scores in the universe to determine the weight of each security.
    • Individual security weights are capped at 4.5%.
    • No Index security weight may be lower than 0.25%
  • The number of securities in the index is limited to 80 securities.
  • The index is reconstituted and rebalanced quarterly.
Fund Overview
TickerSKYY
Fund TypeTechnology
Investment AdvisorFirst Trust Advisors L.P.
Investor Servicing AgentBank of New York Mellon Corp
CUSIP33734X192
ISINUS33734X1928
Intraday NAVSKYYIV
Fiscal Year-End09/30
ExchangeNasdaq
Inception7/5/2011
Inception Price$20.16
Inception NAV$20.16
Rebalance FrequencyQuarterly
Expense Ratio*0.60%
* As of 2/1/2024
The Investment Advisor has implemented fee breakpoints, which reduce the fund's investment management fee at certain assets levels. Please see the fund's Statement of Additional Information for full details.
Current Fund Data (as of 3/15/2024)
Closing NAV1$93.21
Closing Market Price2$93.23
Bid/Ask Midpoint$93.21
Bid/Ask Premium0.00%
30-Day Median Bid/Ask Spread30.05%
Total Net Assets$3,076,092,728
Outstanding Shares33,000,002
Daily Volume128,523
Average 30-Day Daily Volume209,629
Closing Market Price 52-Week High/Low$97.12 / $60.70
Closing NAV 52-Week High/Low$97.09 / $60.68
Number of Holdings (excluding cash)65
Top Holdings (as of 3/15/2024)*
Holding Percent
Oracle Corporation 4.30%
International Business Machines Corporation 3.95%
Alphabet Inc. (Class A) 3.90%
Microsoft Corporation 3.85%
Arista Networks, Inc. 3.83%
Nutanix, Inc. (Class A) 3.83%
Amazon.com, Inc. 3.78%
Pure Storage, Inc. (Class A) 3.63%
Cisco Systems, Inc. 2.58%
MongoDB, Inc. 2.53%

* Excluding cash.  Holdings are subject to change.

NAV History (Since Inception)
Past performance is not indicative of future results.
Fund Characteristics (as of 2/29/2024)4
Maximum Market Cap.$3,073,526
Median Market Cap.$15,982
Minimum Market Cap.$570
Price/Book7.15
Price/Sales3.09
Bid/Ask Premium/Discount (as of 3/15/2024)
  2023 Q1 2024 Q2 2024 Q3 2024
Days Traded at Premium 135 29 --- ---
Days Traded at Discount 115 23 --- ---
Top Sector Exposure (as of 3/15/2024)
Software 49.75%
IT Services 21.21%
Technology Hardware, Storage & Peripherals 10.10%
Communications Equipment 6.42%
Interactive Media & Services 3.90%
Broadline Retail 3.78%
Professional Services 1.29%
Diversified Telecommunication Services 1.28%
Financial Services 0.65%
Health Care Technology 0.64%
Hypothetical Growth of $10,000 Since Inception (as of 3/15/2024) *
Tracking Index: ISE CTA Cloud Computing™ Index

Month End Performance (as of 2/29/2024)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception5
Fund Performance *
Net Asset Value (NAV) 15.87% 8.26% 50.32% -1.42% 11.27% 13.37% 13.38%
After Tax Held 15.87% 8.26% 50.32% -1.54% 11.12% 13.18% 13.24%
After Tax Sold 9.40% 4.89% 29.79% -1.13% 8.91% 11.15% 11.42%
Market Price 15.80% 8.18% 50.26% -1.42% 11.25% 13.35% 13.38%
Index Performance **
ISE CTA Cloud Computing™ Index 16.05% 8.36% 51.30% -0.84% 11.96% 13.99% 14.02%
S&P Composite 1500® Information Technology Index 14.83% 10.38% 57.26% 18.30% 25.49% 21.26% 20.03%
S&P 500® Index 11.98% 7.11% 30.45% 11.91% 14.76% 12.70% 13.33%
Quarter End Performance (as of 12/29/2023)
  3 Month YTD 1 Year 3 Year 5 Year 10 Year Since
Fund
Inception5
Fund Performance *
Net Asset Value (NAV) 15.45% 52.21% 52.21% -2.35% 13.08% 13.15% 12.85%
After Tax Held 15.45% 52.21% 52.21% -2.48% 12.92% 12.96% 12.70%
After Tax Sold 9.15% 30.91% 30.91% -1.83% 10.41% 10.96% 10.91%
Market Price 15.45% 52.19% 52.19% -2.34% 12.97% 13.14% 12.85%
Index Performance **
ISE CTA Cloud Computing™ Index 15.65% 53.26% 53.26% -1.79% 13.67% 13.76% 13.48%
S&P Composite 1500® Information Technology Index 16.92% 56.53% 56.53% 14.71% 26.48% 20.32% 19.36%
S&P 500® Index 11.69% 26.29% 26.29% 10.00% 15.69% 12.03% 12.89%
3-Year Statistics (as of 2/29/2024)
  Standard Deviation Alpha Beta Sharpe Ratio Correlation
SKYY 24.95% -12.20 1.10 -0.03 0.78
S&P Composite 1500® Information Technology Index 23.29% 4.49 1.22 0.74 0.92
S&P 500® Index 17.66% --- 1.00 0.59 1.00
Standard Deviation is a measure of price variability (risk). Alpha is an indication of how much an investment outperforms or underperforms on a risk-adjusted basis relative to its benchmark.Beta is a measure of price variability relative to the market. Sharpe Ratio is a measure of excess reward per unit of volatility. Correlation is a measure of the similarity of performance.

*Performance data quoted represents past performance. Past performance is not a guarantee of future results and current performance may be higher or lower than performance quoted. Investment returns and principal value will fluctuate and shares when sold or redeemed, may be worth more or less than their original cost.

After Tax Held returns represent return after taxes on distributions. Assumes shares have not been sold. After Tax Sold returns represent the return after taxes on distributions and the sale of fund shares. Returns do not represent the returns you would receive if you traded shares at other times. Market Price returns are determined by using the midpoint of the national best bid offer price ("NBBO") as of the time that the fund's NAV is calculated. Returns are average annualized total returns, except those for periods of less than one year, which are cumulative.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.

**Performance information for each listed index is for illustrative purposes only and does not represent actual fund performance. Indexes do not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the performance shown. Indexes are unmanaged and an investor cannot invest directly in an index.

S&P Composite 1500® Information Technology Index - The Index is a capitalization-weighted index of companies classified by GICS as information technology within the S&P Composite 1500 Index.

S&P 500® Index - The Index is an unmanaged index of 500 companies used to measure large-cap U.S. stock market performance.

Footnotes
1 The NAV represents the fund's net assets (assets less liabilities) divided by the fund's outstanding shares.
2 Fund shares are purchased and sold on an exchange at their market price rather than net asset value (NAV), which may cause the shares to trade at a price greater than NAV (premium) or less than NAV (discount).
3 The median bid-ask spread is calculated by identifying the national best bid and national best offer ("NBBO") for the fund as of the end of each 10 second interval during each trading day of the last 30 calendar days and dividing the difference between each such bid and offer by the midpoint of the NBBO. The median of those values is identified and that value is expressed as a percentage rounded to the nearest hundredth.
4 All market capitalization numbers are in USD$ Millions.
5 Inception Date is 7/5/2011

You should consider the fund's investment objectives, risks, and charges and expenses carefully before investing. You can download a prospectus or summary prospectus, or contact First Trust Portfolios L.P. at 1-800-621-1675 to request a prospectus or summary prospectus which contains this and other information about the fund. The prospectus or summary prospectus should be read carefully before investing.

Risk Considerations

You could lose money by investing in a fund. An investment in a fund is not a deposit of a bank and is not insured or guaranteed. There can be no assurance that a fund's objective(s) will be achieved. Investors buying or selling shares on the secondary market may incur customary brokerage commissions. Please refer to each fund's prospectus and Statement of Additional Information for additional details on a fund's risks. The order of the below risk factors does not indicate the significance of any particular risk factor.

Unlike mutual funds, shares of the fund may only be redeemed directly from a fund by authorized participants in very large creation/redemption units. If a fund's authorized participants are unable to proceed with creation/redemption orders and no other authorized participant is able to step forward to create or redeem, fund shares may trade at a premium or discount to a fund's net asset value and possibly face delisting and the bid/ask spread may widen.

The risks related to investing in cloud computing companies include interruptions or delays in service, security breaches involving sensitive, proprietary and confidential information, privacy concerns and laws, and other regulations that may limit or otherwise affect the operations of such companies.

Current market conditions risk is the risk that a particular investment, or shares of the fund in general, may fall in value due to current market conditions. As a means to fight inflation, the Federal Reserve and certain foreign central banks have raised interest rates and expect to continue to do so, and the Federal Reserve has announced that it intends to reverse previously implemented quantitative easing. Recent and potential future bank failures could result in disruption to the broader banking industry or markets generally and reduce confidence in financial institutions and the economy as a whole, which may also heighten market volatility and reduce liquidity. Ongoing armed conflicts between Russia and Ukraine in Europe and among Israel, Hamas and other militant groups in the Middle East, have caused and could continue to cause significant market disruptions and volatility within the markets in Russia, Europe, the Middle East and the United States. The hostilities and sanctions resulting from those hostilities have and could continue to have a significant impact on certain fund investments as well as fund performance and liquidity. The COVID-19 global pandemic, or any future public health crisis, and the ensuing policies enacted by governments and central banks have caused and may continue to cause significant volatility and uncertainty in global financial markets, negatively impacting global growth prospects.

A fund is susceptible to operational risks through breaches in cyber security. Such events could cause a fund to incur regulatory penalties, reputational damage, additional compliance costs associated with corrective measures and/or financial loss.

Depositary receipts may be less liquid than the underlying shares in their primary trading market and distributions may be subject to a fee. Holders may have limited voting rights, and investment restrictions in certain countries may adversely impact their value.

Equity securities may decline significantly in price over short or extended periods of time, and such declines may occur in the equity market as a whole, or they may occur in only a particular country, company, industry or sector of the market.

An index fund will be concentrated in an industry or a group of industries to the extent that the index is so concentrated. A fund with significant exposure to a single asset class, or the securities of issuers within the same country, state, region, industry, or sector may have its value more affected by an adverse economic, business or political development than a broadly diversified fund.

A fund may be a constituent of one or more indices or models which could greatly affect a fund's trading activity, size and volatility.

There is no assurance that the index provider or its agents will compile or maintain the index accurately. Losses or costs associated with any index provider errors generally will be borne by a fund and its shareholders.

Information technology companies are subject to certain risks, including rapidly changing technologies, short product life cycles, fierce competition, aggressive pricing and reduced profit margins, loss of patent, copyright and trademark protections, cyclical market patterns, evolving industry standards and regulation and frequent new product introductions.

Many internet companies have incurred large losses since their inception and may continue to incur large losses in the hope of capturing market share and generating future revenues. Accordingly, many such companies expect to incur significant operating losses for the foreseeable future, and may never be profitable.

Large capitalization companies may grow at a slower rate than the overall market.

Market risk is the risk that a particular security, or shares of a fund in general may fall in value. Securities are subject to market fluctuations caused by such factors as general economic conditions, political events, regulatory or market developments, changes in interest rates and perceived trends in securities prices. Shares of a fund could decline in value or underperform other investments as a result. In addition, local, regional or global events such as war, acts of terrorism, spread of infectious disease or other public health issues, recessions, natural disasters or other events could have significant negative impact on a fund.

A fund faces numerous market trading risks, including the potential lack of an active market for fund shares due to a limited number of market makers. Decisions by market makers or authorized participants to reduce their role or step away in times of market stress could inhibit the effectiveness of the arbitrage process in maintaining the relationship between the underlying values of a fund's portfolio securities and a fund's market price.

An index fund's return may not match the return of the index for a number of reasons including operating expenses, costs of buying and selling securities to reflect changes in the index, and the fact that a fund's portfolio holdings may not exactly replicate the index.

Securities of non-U.S. issuers are subject to additional risks, including currency fluctuations, political risks, withholding, lack of liquidity, lack of adequate financial information, and exchange control restrictions impacting non-U.S. issuers.

A fund and a fund's advisor may seek to reduce various operational risks through controls and procedures, but it is not possible to completely protect against such risks. The fund also relies on third parties for a range of services, including custody, and any delay or failure related to those services may affect the fund's ability to meet its objective.

A fund that invests in securities included in or representative of an index will hold those securities regardless of investment merit and the fund generally will not take defensive positions in declining markets.

High portfolio turnover may result in higher levels of transaction costs and may generate greater tax liabilities for shareholders.

The market price of a fund's shares will generally fluctuate in accordance with changes in the fund's net asset value ("NAV") as well as the relative supply of and demand for shares on the exchange, and a fund's investment advisor cannot predict whether shares will trade below, at or above their NAV.

Securities of small- and mid-capitalization companies may experience greater price volatility and be less liquid than larger, more established companies.

Trading on an exchange may be halted due to market conditions or other reasons. There can be no assurance that a fund's requirements to maintain the exchange listing will continue to be met or be unchanged.

In China, direct ownership of companies in certain sectors by foreign individuals and entities is prohibited. In order to allow for foreign investment in these businesses, many Chinese companies have created variable interest entities ("VIEs") structures to enable indirect foreign ownership. VIEs are not formally recognized under Chinese law. Intervention by the Chinese government with respect to VIEs could significantly affect the Chinese company's performance and the enforceability of the VIE's contractual arrangements that establish the links between the Chinese company and the shell company in which the Fund invests. VIEs are also subject to the investment risks associated with the underlying Chinese issuer or operating company. Chinese companies are not subject to the same degree of regulatory requirements or accounting standards and oversight as companies in more developed countries. As a result, information about the Chinese securities and VIEs in which the Fund invests may be less reliable and incomplete.

First Trust Advisors L.P. (FTA) is the adviser to the First Trust fund(s). FTA is an affiliate of First Trust Portfolios L.P., the distributor of the fund(s).

Nasdaq® and ISE CTA Cloud Computing Index™ are registered trademarks and service marks of Nasdaq, Inc. (together with its affiliates hereinafter referred to as the “Corporations”) and are licensed for use by First Trust. The Fund has not been passed on by the Corporations as to its legality or suitability. The Fund is not issued, endorsed, sold or promoted by the Corporations. THE CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE FUND.

CUSIP identifiers have been provided by CUSIP Global Services, managed on behalf of the American Bankers Association by FactSet Research Systems Inc. and are not for use or dissemination in a manner that would serve as a substitute for any CUSIP service. The CUSIP Database, ©2024 CUSIP Global Services. "CUSIP" is a registered trademark of the American Bankers Association.

Not FDIC Insured • Not Bank Guaranteed • May Lose Value
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
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First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
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